It's not lined. For the basic pattern, I just scaled up the Smaug pattern by using a size P hook and using doubled-up worsted weight yarn. And just add on a few extra rows at the end to extend the neck so there's room for the drawstring. Then I used a small f hook for the eyes, horns, eyebrows, and nostril ridges.
One thing I noticed in the pattern is that in row one you are still doing your previous pattern, so you've got way more than six chains to work with for row 2. It looks like for row one you should do 61 stitches of your pattern, ch6, skip next 48 stitches, do 97 stitches of your pattern, ch6, skip next 48 stitches, and do 61 stitches of your pattern. What this row does is pinch off the sleeves, leaving you with only the "live" stitches needed to make up the circumference for the torso part of the sweater.
So now in row 2 you should be able to Ch4, then just do the *11dc, Ch1, miss 1 chain space* all the way across.
One "pro" for hole-y blankets: they keep the blankets from being too stiff and heavy. I find that even fairly hole-y blankets are still plenty warm, and the holes make them lighter and more pliable (for bunching up/squishing around and snuggling up with)
If you use acrylics, here are some of my observations: vanna's choice is by far the thickest of the worsted weights, and pound of love tends to be on the thinner end, with your normal red hearts and bernat super values in the middle.
It depends on the project, and how/when you're switching yarns. I've found that as long as I use the same yarn for an entire round/row of an afghan, it doesn't matter so much if different rows are slightly different in terms of yarn thickness.